India’s Shrimp industry is currently facing significant uncertainty as it braces for a 26% reciprocal tariff imposed by the Donald Trump administration, set to take effect once the 90-day pause ends. Currently, the tariffs stand at 10%.
The US is the biggest market for Indian shrimp, accounting for nearly 41% of India’s total exports. In FY24, India exported 297,571 million tonnes (MT) of frozen shrimps valued at $4.8 billion to the US, according to the Marine Products Export Development Authority (MPEDA).
The “complete uncertainty” is hurting the sector, according to Pavan Kosaraju, CEO of AquaExchange, a Veeravalli (Andhra Pradesh)-based technology firm that provides aquaculture solutions. “When we speak of this tariff, who is going to bear this extra cost is the biggest question. Will the importers bear the price or will the end consumers bear it? In the shrimp sector here, it is mostly the latter. Some sectors divide these tariffs 50/50. India runs with a 26% local tariff; in addition to this, there is a 5.7% countervailing duty (CVD) and a 2.49% anti-dumping duty. This comes to a total of 34.19% now,” he said.
He further explained that even if only 26% is being split, Indian companies are expected to absorb the 13% extra cost, which is almost double the margins they currently earn. Such a scenario renders it unviable for processors to operate. This burden is subsequently passed on to farmers.
“Given the higher incidence of crop losses that we see in the market recently, the farmers are working with the same kind of margin, 10-15%. The moment you add a 13% tariff here, it becomes unviable for farming. We have also seen a few incidents where farming associations or regional farming groups take a crop holiday because of this,” he said.
Added Yogesh Gupta, MD of Kolkata-based shrimp processor Megaa Moda: “The Indian government should fight for this sector and try diplomatically to get rid of ADD/CVD and do hard negotiation on bilateral agreements. Other support like IES (Indian Export Standards), etc., will give temporary relief but is much needed now.”
He strongly advocated for the introduction of TMA (Transport and Marketing) assistance for this sector, citing the extremely high freight costs.
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Source: https://economictimes.indiatimes.com/
Link: https://economictimes.indiatimes.com/small-biz/trade/exports/insights/in-troubled-waters-trumps-tariffs-threaten-indias-shrimp-lifeline/articleshow/120539170.cms?from=mdr